The Weekly 411:

Today we're covering

📉 New Condo Sales Crash in Toronto

🚧 Toronto Condo Construction Delays Skyrocket

🌎 Meet us at the International Property Show This Week!

☪️ Halal Mortgages — Explained

😙 Rising Confidence in Canadian Real Estate

Read Time: 3 minutes

📉 New Condo Sales Crash in Toronto

• New condo sales in the Toronto/Hamilton area dropped to just 1,461 units in Q1 2024, the lowest since the 2009 global recession.

• Precon demand has dropped due to new condo prices reaching an average of $1,800 per square foot downtown.

• Developers have halted at least 21,505 planned condo units since 2022 due to collapsing sales.

• Projects launched in Q1 2024 were only 50% sold (on average), well below the 70% lenders typically require for construction financing.

Why It Matters: Resale condos offer a much better deal: buyers can find larger units at lower prices than new builds. Even recent federal measures targeting first-time buyers, like 30-year mortgages, won't help much since Toronto-area developers still demand 20% down payments.

🚧 Toronto Condo Construction Delays Skyrocket

•  The number of delayed condo units in Toronto has quadrupled since last summer, now exceeding 11,500 units.

• The delay trend extends across the GTA, with over 21,500 delayed units in the Greater Toronto and Hamilton Area (GTHA).

• Only four new condo projects (958 units total) came to market in Q1 2024, reflecting the slowdown.

The industry is waiting for signs of relief, likely tied to lower interest rates.  Developers can't secure construction financing without strong pre-sales, made difficult by high costs and buyer hesitancy.

🌲 Capital Gains Tax Change Sparks Cottage Sell-Off 

• Federal capital gains tax increase (June 25th) creates a dilemma for cottage owners: sell now or pay significantly more tax later.

• Experts predict a short-term surge in cottage listings as owners rush to sell before June.

• Developers of soon-to-be-completed cottage projects are also under pressure to sell quickly.

Why It Matters: The market is already unfavorable for sellers: high interest rates have created excess inventory and lowered buyer demand. Waiting until May/June may allow buyers to benefit from lower prices. However long-term, many cottage owners intend to keep their properties as family legacies and may not be swayed by the tax change.

🌎 Grab Your Free Tickets for The International Property Show This Weekend

Meet us at the Canada International Property Show on April 27-28th in Toronto! Access exclusive global investments, strengthen your portfolio and expand your professional network. 

Why You Should Attend:

• Connect with 100+ international developers

• Get expert advice on investing, mortgages, and citizenship through investment programs

• Discover exclusive property deals and on-site incentives

• It's free to attend! Learn more and get your tickets​

• Meet the Urban411 team! 😊

☪️ Halal Mortgages — Explained

What's all this talk about halal mortgages? Here's everything you need to know about this new niche financial product.

What is it?

• Halal mortgages are interest-free home financing products designed to comply with Islamic principles (Sharia law). They are currently offered by specialized financial institutions, not major Canadian banks.

• Rather than traditional interest-based lending, they are structured around profit, partnership, or rent-to-own models.

Who's eligible?

• They are available to anyone in Canada (Muslim or non-Muslim) who meets the lender's creditworthiness and down payment requirements.

What's the benefit?

• Potential benefits include long-term fixed rates, but they may have higher fees or overall costs compared to traditional mortgages

What's the controversy?

The 2024 federal budget signals interest in expanding access to halal mortgages. Some argue major banks should offer halal mortgages to increase financial inclusion. Others warn this fundamentally conflicts with standard banking models, and risks being used politically.

😙 Rising Confidence in Canadian Real Estate

• According to an RBC Home Ownership Poll, 29% of Canadians surveyed plan to buy a home within the next two years.

• Half of Canadians find saving for a home harder due to inflation, especially those planning to buy soon.

• 73% of recent immigrants also intend to buy a home, with 65% looking to purchase within the next 2 years.

Why It Matters: Buyers are turning to alternative methods to save for a down payment, including side hustles and living with parents longer. Overall, the report shows a positive sentiment for real estate among new generations of buyers.

🖼 Image of The Week

They say a picture is worth a thousand words. So we've decided to share one image every week that describes how we feel about the news that week.